Which of the following is NOT a potential expo- sure of the FRS? a. a defective audit trail b. general ledger accounts that are out of balance with subsidiary accounts c. unauthorized access to the check register d. unauthorized access to the general ledger
Q: When transactions are entered in wrong accounts, the classification assertion is violated. * True…
A: Classification Assertion. The assertion is that all transactions have been recorded within the…
Q: What is the primary difference between fraud and error infinancial statement reporting?a. The…
A: Financial statements are those statements which are prepared at the end of the period for the review…
Q: When the client’s internal control are good, internal documents are more reliable than external True…
A: The question is related to true or false on Auditing.
Q: An audit opinion of a company’s fi nancial reports is most likely intended to:A . detect fraud.B .…
A: Audit opinion: The opinion present by an auditor of findings of the audit examination is known as…
Q: Computers remove a fundamental separation of functions between authorizing and processing…
A: It is a true statement that computers remove a basic separation strategy of separating the functions…
Q: The susceptibility of an assertion about a class of transaction, account balance or disclosure to a…
A: Audit risk is the possibility that an auditor won't find fraud or errors while reviewing a client's…
Q: Explain the difference between an attribute and an exceptioncondition. State the exception condition…
A: Introduction: Auditing: The process through which the financial information reported in the…
Q: Substantive procedure does not involve in: Checking the operating effectiveness of internal control…
A: Substantive procedure: Substantive procedures are audit procedures performed to detect misstatement…
Q: Explain why deficiencies in internal controls might not always result in significant misstatements…
A: Internal controls are the systems, rules, and processes implemented by a company to ensure the…
Q: One aspect of internal control requires companies to maintain adequate documentation and records.…
A: Internal controls procedures are those procedures which are established for achievement of…
Q: the susceptibility of an account balance or class of transactions to misstatements that could be…
A: Internal controls: Internal controls are maintained to decline the possibility of fraud. They ensure…
Q: Controls that enhance the accuracy and reliability of the accounting records are automated…
A: Accounting control is the manner in which process are configured to. Manage risk within an…
Q: Which one of the following is not an advantage of internal controls? Select one: a. It safeguards…
A: Internal control is an auditing and accounting tool that ensures operational efficiency and…
Q: 8 Answer is not complete. a. Evaluating the effectiveness of the client's internal control in…
A: Risk Assessment: The client’s internal control is evaluated to get the effectiveness of it. It is…
Q: From the list of assertions provided, select the relevant assertion(s) to each control objective.…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Discuss any separation of duties necessary to control against unauthorized entries to the general…
A: General Ledger: The financial information required for the preparation of financial reports of…
Q: In which of the following circumstances would an auditor expect to find that an entity had…
A: Definition: Audit: Audit is the process of verification of the compliance of the financial…
Q: Indicate which statements are true and which are false. Separation of recordkeeping for assets from…
A: One of internal control policy to safeguard assets is segregation of duties which is separation of…
Q: which of the following regarding errors is correct Select one: a. intentional misstatement of the…
A: The financial statements are said to reflect the correct and accurate picture of the company when…
Q: Why do fraud examiners handle information in a different manner than auditors? Why is thisimportant?
A: Fraud examiners handle information in a different manner than auditors, in order to minimize the tax…
Q: The risk that the auditors’ own testing procedures will lead to the decision that…
A:
Q: do deficiencies in internal control not always lead to material misstatement when recording…
A: internal controls rules and procedures that are implemented in order to ensure the integrity and…
Q: which of the following regarding errors is correct Select one: a. it is easier for the auditor to…
A: Ans. Errors can be of two types - i. Intentional error ii. Unintentional error Intentional errors…
Q: Which of the following statements is FALSE? A. Irregularities are intentional misrepresentations…
A: A. An accounting irregularity is an entry or statement that does not conform to the normal laws,…
Q: Which is not a forensic-type certificate? A. FASNA. B. CFE. C. CRFAC. D. MAFF.
A: Forensic type certificates are the courses which allows someone to become forensic accountant. There…
Q: INSTRUCTION(s): For every general potential error type enumerated below, list down some basic…
A: Internal control: Internal control is a process which ensures continuous reliability of…
Q: When processing controls within the accounting information system may not leave visible evidence…
A: When processing controls within the accounting information system may not leave visible evidence…
Q: Auditors of ERP systemsa. need not be concerned about segregation of duties because these systems…
A: Auditors of Enterprise Resource Planning: The responsibility of an auditor is to gather knowledge…
Q: Which of the following is NOT a general control?* a. Backup of live data b. Use of passwords c.…
A: For data protection and IT security, various types of internal controls is implemented by the…
Q: An auditor discovered the following matters while performing tests of controls: 1.An obligation for…
A: Internal Controls: The process designed, implemented, and maintained by those charged with…
Q: Which of the following evidence provides the least assurance of reliability? A. Accounts receivable…
A: Audit evidences can be collected from internal and external sources. Internal evidences are based on…
Q: Which one of the following statements is most appropriate to Control risk? Susceptibility of account…
A: Auditing means the independent checking of company operation by outsider. Auditor is qualified and…
Q: Explain why it is common for auditors to send confirmationrequests to vendors with “zero balances”…
A:
Q: The likelihood that material misstatements may have entered the accounting system and notbeen…
A:
Q: Audit evidence obtained through inquiry of management about proper segregation of custodianship and…
A: Solution Reliability of audit evidence The reliability of audit evidence shall be considered based…
Q: The following audit procedures are included in the auditprogram because of heightened risks of…
A: a.
Q: Following are examples of control deficiencies that may represent significant deficiencies or…
A: Whether a deficiency is classified as a significant deficiency or a material weakness is determined…
Q: Vendor invoices are recorded for items that were never ordered by the company. Which of the…
A: If the invoices are recorded for items that were never ordered by the company then such an issue can…
Q: Required For each of the questions above, answer the following: a) State the purpose of the internal…
A: Here asked for multi sub part question we will solve for first three sub part question for you. If…
Q: Which one of the following is not an objective of a system of internal controls? Select one: 1.…
A: Internal controls are the mechanisms, rules, and procedures implemented by a company to ensure the…
Q: Using prenumbered checks and having an approved invoice for each check is an example of Select one:…
A: Internal controls are approaches and strategies put in place to guarantee the proceeded reliability…
Q: Which of the following would probably not be considered an indication of a material weakness?a.…
A:
Q: From the list of assertions provided, select the relevant assertionts) to each control objective.…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: How to ensure that overstatement as well as misstatements of account balances due to redundancy and…
A: Overstatement of account balances means reporting the account balances at an amount above the actual…
Q: Generally, which of the following audit procedures is the least expensive to perform? A.…
A: Analytical procedures are the least expensive audit procedures to perform. Test of controls are…
Q: Which of the following tests of controls is most useful in assessing the transaction-related audit…
A: The audit is a thorough and critical review of the company's account books. Auditing would be…
Which of the following is NOT a potential expo- sure of the FRS?
a. a defective audit trail
b. general ledger accounts that are out of balance with subsidiary accounts
c. unauthorized access to the check register
d. unauthorized access to the general ledger
Step by step
Solved in 2 steps
- Which of the following statements is NOT correct? a. EAMs capture transactions during processing without removing the application from service. b. EAMs support continuous monitoring of controls. c. EAMs have the potential to corrupt corporate databases d. EAMs decrease operational performance. e. All of the above are correct statements.In which of the following circumstances would an auditor expect to find that an entity had implemented automated controls to reduce risks of misstatement?a. When errors are difficult to predict.b. When misstatements are difficult to define.c. When large, unusual, or nonrecurring transactions require judgment.d. When transactions are high volume and recurring.When an audit team does not receive a response on a positive accounts receivable confirmation, auditors should do all of the following excepta. Send a second request.b. Do nothing for immaterial balances.c. Examine shipping documents.d. Examine client correspondence files.
- Explain the difference between an attribute and an exceptioncondition. State the exception condition for the audit procedure: The duplicate salesinvoice has been initialed indicating the performance of internal verification.When completing the audit of internal controls for an issuer, the severity of an internal control deficiency depends ona. Whether there is a reasonable possibility that the company’s controls will fail to prevent or detect a misstatement of an account balance or disclosure.b. Whether a misstatement has actually occurred as a result of the deficiency.c. The magnitude of the potential misstatement resulting from the deficiency or the deficiencies.d. Both a and c are correct.e. All of the above are correct.the susceptibility of an account balance or class of transactions to misstatements that could be material, individually or when aggregated with misstatements in other balances or classes, assuming that there were no related internal control is called : Select one: a. control risk b. audit risk c. detection risk d. inherent risk
- Which of the following is an incorrect statement? a. The amount of audit work should vary inversely with the likelihood of material misstatements existing in the accounting records. b. The better the organization’s control structure, the less likely it is that material misstatements will be present c. Complex or unusual transactions are more likely to be recorded in error than recurring or routine transactions are d. If misstatements are likely to occur in the recording process, the auditor should develop procedures to detect misstatements.Which of the following statements is FALSE?A. Irregularities are intentional misrepresentations associated with the commission of a fraudB. Errors are unintentional mistakesC. Data conversion provides safe storage for the off-line data files. These files could be backups or current data files.D. Before the auditor can determine the nature and extent of the tests to perform he or she must gain a thorough understanding of the client’s businessWhich of the following statements is associated with analytical procedure test? a. It helps to identify the errors in journal and ledger. b. It helps to test the internal control system. c. It helps to study the comparison of relationships among balance sheet accounts. d. It helps to discover detailed misstatements in the financial statements.
- The likelihood that material misstatements may have entered the accounting system and notbeen detected and corrected by the client’s internal control is referred to asa. Inherent risk.b. Control risk.c. Detection risk.d. Risk of material misstatement.Which of the following best describes the reason why an independent auditorreports on financial statements?(1) A misappropriation of assets may exist, and it is more likely to be detected byindependent auditors.(2) Different interests may exist between the company preparing the statementsand the persons using the statements.(3) A misstatement of account balances may exist and is generally corrected as theresult of the independent auditor’s work.(4) Poorly designed internal controls may be in existenceFollowing are examples of control deficiencies that may represent significant deficiencies or material weaknesses. For each of the following scenarios, indicate whether the deficiency is a significant deficiency or material weakness. Justify your decision. a. During its assessment of ICFR, the management of Lorenz Corporation and its auditors identified the following control deficiencies that individually represent significant deficiencies: • Inadequate segregation of duties over certain information system access controls. • Several instances of transactions that were not properly recorded in subsidiary ledgers. While the transactions that , weren’t recorded properly were not material, the gross amount of the transactions of that type totaled up to an amount several times materiality. • A lack of timely reconciliations of the account balances affected by the improperly recorded transactions. b. During its assessment of ICFR, management of First Coast BankCorp and its auditors…